Ali’s blog

Mostly quant stuff with occasional digressions

Peak oil (again)

Posted by alifinmath on April 15, 2008

In the FT:

Russian oil production has peaked and may never return to current levels, one of the country’s top energy executives has warned, fuelling concerns that the world’s biggest oil producers cannot keep up with rampant Asian demand.

The warning comes as crude oil prices are trading near their record high of $112 a barrel, stoking inflation in many countries.

Leonid Fedun, the 52-year-old vice-president of Lukoil, Russia’s largest independent oil company, told the Financial Times he believed last year’s Russian oil production of about 10m barrels a day was the highest he would see “in his lifetime”. Russia is the world’s second biggest oil producer.

Mr Fedun compared Russia with the North Sea and Mexico, where oil production is declining dramatically, saying that in the oil-rich region of western Siberia, the mainstay of Russian output, “the period of intense oil production [growth] is over”.


6 Responses to “Peak oil (again)”

  1. Chris Prouty said

    I have a hard time taking this “peak oil” nonsense seriously. The peak oil drum has been beating since literally the 1950’s, and never has it turned out to be true. Of course, that doesn’t mean it can’t be true now, but there are oil extraction methods that have only recently become profitable. If it seems clear that current market prices will persist, then there is no question that these alternative sources will be tapped. To cite a prime example, the Canadian oil sands are estimated to contain more extractable oil than Saudi Arabia in its prime. Extracting oil from this source costs roughly $60/barrel, as opposed to the $8 that it costs in the Arab states. The oil is there, we just need to develop the infrastructure and pay for it.

  2. alifinmath said

    Hubbert’s prediction with regard to the US was correct (he forecast peak production somewhere between 1965 and 1970; production peaked in 1970 and has been declining ever since). No major oil fields have been discovered in the last several years (except for a new Brazilian one whose size has yet to be determined). So perhaps we’ll be stuck with the tar sands of Venezuela and Canada.

  3. Anonym said

    The tar sands in Alberta and Venezuela, oil shale in the U.S., and coal gasification could help stave off the “end of oil” for a long time. Of course those will eventually run out too, so better to work on viable alternatives now (and avoid strip mining the planet, increasing CO2 levels, etc.)

  4. Chris Prouty said

    Can’t we all just calm down and enjoy our soylent green?

  5. alifinmath said

    That was one of the better films Charlton Heston acted in (unlike “Planet of the Apes”). And I’ll take your comment as black humor since we may be closer to some such scenario than I’m comfortable with — or at least with a world of genetically engineered foodstuffs (if not recycling humans for consumption).

  6. alifinmath said

    More on peak oil here:

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